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Archive for the ‘Big Government’ Category

Since I think comparative economics can be very enlightening, I’m quite pleased to see a new study by David Burton of the Heritage Foundation, which uses several metrics to assess the relative merits of socialism and free enterprise.

This is not necessarily an easy task since socialism is a moving target.

Some people still adhere to the technical definition, which means government ownership, central planning, and price controls. While others assume that socialism is high tax rates and lots of redistribution.

Here’s David’s summary.

State ownership of the means of production is the central tenet of traditional socialist or communist thought. Traditional socialist and communist economic policies involve state-owned enterprises and a high degree of state control over all aspects of economic life. Over time, politicians came to understand that they did not need to have legal ownership of, or legal title to, businesses or other property in order to control them by regulation, administrative actions, or taxation. Furthermore, not having legal title meant that they could disclaim responsibility when government control did not work out well. Thus, the meaning of the term “socialist” evolved considerably during the last half of the 20th century to mean a strong state role in the economy, the pursuit of aggressive redistributionist policies, high levels of taxation and regulation, and a large welfare state—but not necessarily government ownership of the means of production.

Regardless of how it’s defined, it doesn’t work. And the closer a country is to technical socialism, the greater the economic misery.

David reviews and analyzes a lot of material and I recommend the entire report.

For today’s purposes, though, I want to focus on his ethical arguments.

Here’s how he describes the morality of capitalism.

As a libertarian, I’m especially sympathetic to the argument about cooperative exchange versus coercion.

As an economist, I’m naturally sympathetic to the argument about prosperity versus poverty.

And I hope everyone agrees with the arguments about individual choice and civil society.

Now let’s look at David’s description of the morality of socialism.

For what it’s worth, I think the final point is the most compelling.

Socialism (whether the technical version or the redistribution version) basically creates a zero-sum game in which people are told it is moral to take from others simply because they produce more.

And this doesn’t necessarily mean the poor taking from the rich. Yes, that’s a big part of it, but there are all sorts of government programs that burden lower-income and middle-class people in order to line the pockets of the well-connected.

Last but not least, David charitably focuses on democratic socialism rather than Marxist socialism, so he’s not even counting the horrible abuses that you find in socialist regimes such as Cuba, North Korea, and Venezuela.

P.S. While I realize we shouldn’t laugh about an ideology that has produced so much misery, I do have a collection of anti-socialist humor.

P.P.S. I strongly recommend this speech by Dan Hannan about the superiority of markets over socialism.

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I admired the Tea Party because it was made up of people who were upset by the bipartisan waste and corruption of Washington. And I think they even had a positive – albeit only temporary – effect.

But the “Yellow Vest” protesters in France, as I explain in this interview, are much less coherent.

Needless to say, I’m glad the Yellow Vests are upset about France’s oppressive tax regime. In that sense, they are like the Tea Party in America.

But the Tea Party also wanted smaller government. That doesn’t seem to be the case in France.

Which means the Yellow Vests are either ignorant or hypocritical. After all, the burden of government spending is very onerous in France, and the country also has high levels of debt. So how is the government supposed to lower taxes unless there’s at least some degree of spending restraint?!?

Some of the Yellow Vests seem to think that class-warfare taxes on the rich could be a silver bullet, but that didn’t work for Francois Hollande and there’s no reason to think it would work for Emmanuel Macron.

Ironically, some American politicians think America should copy France.

Veronique de Rugy, who was born and raised in France but is now an American, explained for FEE why her former nation is not a role model.

…what Sanders and AOC actually have in mind is a regime more like that of France. …That’s because there is one aspect in particular that the AOCs and Sanders of the world fail to mention to their followers when they talk about their socialist dream: all of the goodies that they believe the American people are entitled to receive in fact come at a great cost—and so the only way to pay for these goodies is with oppressive and regressive taxes (i.e., taxes heaped on to the backs of the middle class and the poor). …Paris relies disproportionately on social-insurance, payroll and property taxes. …In France, VAT and other consumption taxes make up 24% of revenue… Consumption taxes often fall hardest on the poor and middle class, who devote a greater proportion of their income to consumption.

Amen.

Big government means stifling taxes on lower-income and middle-class taxpayers. This is the point I’ve made, over and over again.

But Veronique notes that France also suffers from excessive regulation and other forms of intervention.

France has all sorts of labor regulations on the books: some preventing firms from firing workers and, hence, creating a disincentive to hire workers in the first place. …the French also have all sorts of “generous” family friendly laws that end up backfiring and penalizing female employment. …All of these policies make the lives of lower and middle-class people harder… The bottom line is this: All those people in America who currently fall for the socialism soup that AOC and Sanders are selling need to realize that if their dream came to pass, they, not the rich—not the bankers and politicians—will be ones suffering the most from the high taxes, high unemployment, and slow growth that go hand in hand with the level of public spending they want.

Interestingly, Bloomberg recently reported that the French want tax cuts.

The French want to pay less tax. That was the clear message that emerged from a two-month “Great Debate” that saw voters present their grievances and suggest remedies to President Emmanuel Macron. …Prime Minister Edouard Philippe said…“The clear message is that taxes must fall and fall fast.” …Macron announced the “Great Debate” in December to respond to the Yellow Vest protests… Among the findings, valued added tax and income tax were the levies that most people listed as needing reduction. …For 75 percent of the participants, the lower taxes must be accompanied by cutting government spending, though they were vague about where the cuts should come, with 75 percent citing “the lifestyle of the state.”

This is all good news. And it does echo polling data I shared back in 2013.

But I’m nonetheless skeptical. I suspect the French (including the Yellow Vests) would be rioting in the streets if the government proposed to curtail the nation’s bloated welfare state.

Though I hope I’m wrong.

In any event, there are signs that President Macron actually does want to move policy in the right direction.

He’s already gone after some bad tax and regulatory barriers to prosperity.

And the Wall Street Journal recently opined about his effort to trim the country’s massive bureaucracy.

The French President is still reeling from months of “yellow vest” protests against his poorly conceived fuel-tax hike, but now he has a much better idea to take on France’s infamously bloated civil service. …Bureaucrats would lose much of their extra time off and instead work the 35-hour week that’s standard in the private economy. The plan would streamline staff reassignments within the civil service and make it easier for local officials to reorganize government departments. …if the reforms happen, they’ll still be a long-overdue step in a country where 5.5 million government employees out of a population of 67 million consume around 13% of GDP in wages. …The political test will be whether Mr. Macron can dust himself off from his fuel follies and persuade French voters to embrace another crucial reform.

I’ll close with the pessimistic observation that France may have passed the tipping point.

Simply stated, government is so big and there’s so much dependency that real reform is politically impossible.

Heck, I worry the United States is on the same trajectory.

P.S. Veronique has a must-watch video explaining why America shouldn’t become another France.

P.P.S. While I’m sympathetic to Macron’s domestic agenda, he’s very bad on European-wide policy issues.

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Argentina is a sobering example of how statist policies can turn a rich nation into a poor nation.

I’m not exaggerating. After World War II, Argentina was one of the world’s 10-richest nations.

But then Juan Peron took power and initiated Argentina’s slide toward big government, which eroded the nation’s competitiveness and hampered growth.

Even the Washington Post‘s Bureau Chief shares my assessment.

Perón’s rise marked the start of the country’s long, slow slide. …big-government populism squandered Argentine’s fortunes on nationalized railroads and ports. Perón’s pro-labor policies cultivated devout working-class followers but also laid the groundwork for the conversion of his party into an entity that would mirror a corrupt union. …The country battled bouts of damaging inflation in 1955, 1962, 1966 and 1974. …in the 1980s, Argentina saw a bonanza of public-sector hiring, bloated budgets… Cristina Fernández de Kirchner, the Perónist ex-president, took the helm a decade ago, ushering in a new era of fudged financial data and populism.

Thanks to endless bouts of bad policy, the nation suffers from perpetual crisis.

…a country stuck in what has now become its natural state: crisis. As if living a deja vu, I flipped on the TV to once again hear Argentine newscasters fretting about bailouts, the diving peso and fears of default. Beggars — even more than before — panhandled on the same corner by an imposing church on Santa Fe Avenue. As others had done years before, stores advertised going-out-of-business sales. …Argentina is doomed to a repeating history of financial emergencies. You can almost set your watch to it, and, worryingly, the intervals between implosions are growing ever shorter.

If we focus on policy this century, there was plenty of bad policy under the previous Peronist-oriented Presidents.

And since government amassed so much power over the economy, nobody should be surprised by this BBC report about rampant corruption.

More than a dozen people have been arrested in Argentina after copies of notebooks were found detailing what seem to be illicit political payments. They were kept by Oscar Centeno, who was employed as a driver by a public works official and describe delivering bags of cash. The notebooks cover from 2003 to 2015, when Cristina Fernández and her late husband Néstor Kirchner were president. …She has previously said she is being politically persecuted by the current government, who want to distract people from the country’s economic problems. …the payments total around US$56m (£43m), but Judge Claudio Bonadio says the corruption network could reached up to US$160m.

The Economist reports that the current president, Mauricio Macri, is imposing his share of bad policies, including price controls.

The measures are a change of course for a president who sought to undo the effects of more than a decade of populist government. The most important one is a…revival of a price-control mechanism in force under the two Peronist presidents who preceded him, Néstor Kirchner and his wife, Cristina Fernández de Kirchner. In Mr Macri’s version, which he, like the Kirchners, calls “precios cuidados” (“curated prices”), the price of 64 consumer items, from milk to jam, will be frozen for six months (ie, until the eve of the election). An “army” of inspectors, under the direction of the production ministry, will enforce supermarkets’ adherence to the freeze.

Price controls are spectacularly misguided.

Politicians cause inflation by having the central bank create too much money. They then act as if the result rise in prices is the fault of “greedy businesses” and impose controls.

All of which never ends well (see Venezuela, for instance).

But Macri is also adopting other bad policies.

The government has also opened new credit lines for pensioners and families with children and expanded a plan to build new homes with state financing.

He obviously hopes his short-sighted policies will enable him to prevail in the upcoming elections.

And maybe he will if his main opponent is similarly bad.

But at least one candidate supports pro-market reforms.

Argentine economist José Luis Espert once described President Mauricio Macri’s political movement as “kirchnerism with good manners,”… Now a presidential candidate himself, Espert wants to make government a lot less polite. “We need to lay off approximately 1.5 million public employees,” Espert, the head of the newly-formed Libertarian party, told AQ in an exclusive interview. “What I propose is a complete U-turn.” …The economist claims that he is the only candidate who can actually turn around what he describes as “Argentina’s century-long failure, marked by economic populism.” …“We need to abandon our model of import substitution and of running budget deficits, and revise our labor laws, which are similar to those during Italian fascism. We need to have free trade and a state that can pay for itself through reasonable taxes,” added Espert, who on Feb. 2 released a book called The Complicit Society, in which he describes “the economic myths that led Argentina to decadency.”

Wouldn’t it be a great ending to the story if Argentina become another Chile?

My fingers certainly will be crossed (as they are currently for Brazil).

Ironically, even though the International Monetary Fund has subsidized bad policy in Argentina with periodic bailouts, some of the economists who work at the IMF actually understand what’s plaguing the country.

Here are some excerpts from their study, starting with a description of how big government is stifling prosperity.

Argentina’s economic fortune has been on a declining path for a long time. Argentina’s per capita output relative to that of advanced economies nearly halved over the past 50 years. …yearly labor productivity growth has been close to zero on average since 1980… Argentina’s regulatory and administrative burden on businesses is one of the heaviest among EMs… Argentina has the worst overall PMR index among 42 OECD and non-OECD countries, owing to high barriers to entrepreneurship (including complex regulatory procedures which impede firm entry/expansion, and barriers in network sectors), …high trade and other external barriers, and a significant involvement of the state in the economy, both through state-owned enterprises and price controls. …Stringent labor market regulations, such as high firing costs and restrictions on temporary employment, hamper efficient allocation of resources in the economy, discourage investment, and lead to labor underutilization and informality… High tax burden, especially on labor, have similar adverse effects on investment, labor utilization (particularly formal employment), and overall competitiveness of the economy.

Here’s a chart showing how Argentina is de-converging, which is remarkably depressing since conventional theory tells us that poor nations should be catching up with rich nations.

Here are the main findings from the study.

The main objective of this paper is to…assess the role of the reforms in boosting long-term GDP growth through their impact on (i) capital accumulation, (ii) labor utilization, and (iii) total factor productivity or efficiency. …The paper finds that structural reforms can have significant impact on long-term GDP growth through all three supply-side channels. …An ambitious reform effort, which were to improve business regulatory environment (closing half the gap with Australia and New Zealand over two decades), would add 1–1½ percent to average annual growth of GDP. Reducing trade tariffs and payroll taxes (closing half the gap with Australia and New Zealand) could each boost average annual real GDP growth by about 0.1 percent.

Keep in mind, by the way, that even small increments of sustained growth make a huge difference to a nation’s long-run prosperity.

Here’s a table showing the IMF’s suggested reforms.

I actually agree with almost everything on the list.

The only mistake is calling for aggressive anti-trust laws. Yet history teaches us that such laws wind up being tools to protect incumbent companies.

Moreover, the best way to fight monopolies is to have completely open entry to the marketplace.

But I don’t want to quibble. By IMF standards, that list of proposed policies is excellent.

P.S. Pope Francis inexplicably wants to export the failed Argentine model to the rest of the world. Not surprisingly, I think Thomas Sowell and Walter Williams have a better approach.

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Bernie Sanders demonizes the rich and argues that millionaires need to pay higher tax rates in order to finance a bigger burden of government.

Which presumably means that he should surrender more of his income, since he is part of the gilded class. The New York Times has a report on the Vermont Senator’s lavish income.

Senator Bernie Sanders of Vermont, a leading candidate for the Democratic presidential nomination, disclosed 10 years of tax returns on Monday… He and his wife, Jane O’Meara Sanders, reported income that topped $1 million in 2016 and 2017… Mr. Sanders’s higher income in recent years has created some political awkwardness for the senator, who in his 2016 presidential campaign frequently railed against “millionaires and billionaires” and their influence over the political process. …His income now puts him within the top 1 percent of taxpayers, according to data from the Internal Revenue Service.

Yet when asked why he didn’t pay a big chunk of his income to the IRS, Sanders showed typical statist hypocrisy by giving the same reason used by every rich person (including Trump) and every big corporation.

Fox News has the details.

Early in the program, Sanders was asked about the 10 years worth of tax returns he had released just before the program, which showed that he had an adjusted gross income of $561,293 in 2018, on which he paid a 26 percent effective tax rate. Baier asked Sanders why he’s holding onto his wealth rather than refusing deductions or writing a check to the Treasury Department — since Sanders had said he voted against Trump’s tax bill that he himself benefitted from. “Pfft, come on. I paid the taxes that I owe,” Sanders replied.

If he actually followed the law and paid his taxes, that puts him ahead of some of his fellow leftists, such as Tim Geithner and Tom Daschle.

But that’s still not good enough, at least if Sanders is serious in wanting to resurrect FDR’s infamous second Bill of Rights.

For what it’s worth, the notion that people have a right to free stuff is the core principle behind the so-called Green New Deal.

Yet if Sanders wants to minimize his own tax bill, why should he complain when the rest of us try to protect ourselves from being victimized by his redistribution agenda?

Though I will admit that Sanders is probably a sincere hypocrite.

After all, would anyone other than a committed leftist support Venezuela’s leftist dictatorship?

And let’s not overlook the fact that Crazy Bernie has some crazy advisers with the same crazy viewpoint, as revealed by the Wall Street Journal. Like their boss, they have a perverse admiration for the despotic hellhole of Venezuela.

Socialism is cool again, and Bernie Sanders wants to reassure voters that there’s nothing to worry about. “I think what we have to do, and I will be doing it, is to do a better job maybe in explaining what we mean by socialism—democratic socialism,” Mr. Sanders said last month. …But we’ve been reading the work of Bernie’s senior political advisers… Take speechwriter David Sirota, who joined the Sanders campaign in March… Mr. Sirota wrote an op-ed for Salon in 2013 titled “Hugo Chávez’s Economic Miracle.” …Sirota wrote… “in a United States that has become more unequal than many Latin American nations, are there any constructive lessons to be learned from Chávez’s grand experiment with more aggressive redistribution?” …Mr. Sanders’ political director, Analilia Mejia, spent part of her childhood in Venezuela and told the Atlantic in 2016 that “it was better to live on poverty-level wages in a shantytown in Venezuela than on a garment-worker’s salary in Elizabeth, New Jersey.” …senior policy adviser Heather Gautney visited Caracas in 2006…wrote about how Chávez had “implemented a serious [sic] of programs to redistribute the wealth of the country and bolster social welfare.” …She also wrote that “today’s neoliberal capitalist system has become utterly incompatible with the requisites of democratic freedom.” …Mr. Sanders is…a leading candidate…and these are the people who would staff his White House. Voters need to understand that they don’t merely admire Venezuela. By their own words, they want America to emulate it.

I’m almost at a loss for words. People are starving in Venezuela. Women are being forced into prostitution. Families are eating household pets.

Yet Bernie’s people think we should mimic Venezuela’s horrid socialism.

I’m not sure whether to laugh or cry.

But since I prefer laughter, let’s close with same Bernie-themed humor, starting with this gem from the satirists at Babylon Bee.

Needing to cool off from the high-stress life of a U.S. senator who has to work three days a week, Bernie Sanders was spotted Tuesday ranting at the wide selection of deodorants at a D.C.-area Target. “There are people who don’t have enough food to eat in this world, and yet there are 29 different brands of deodorant here!” Sanders bellowed, citing the two completely unrelated facts for some reason. … Several shoppers attempted to go around Sanders but he blocked the aisle, ranting to them about the 1% and the failures of capitalism before they ran away, frightened. …At publishing time, Sanders was seen in the snacks aisle ranting about how no country needs three different varieties of Flamin’ Hot Cheetos.

By the way, this isn’t random humor.

Sanders is such a crazy crank that he actually has condemned capitalism for providing too many underarm choices.

This Branco cartoon also hits the nail on the head.

P.S. If you like this bit of mockery, you’ll probably like Branco’s cartoons about the sequester and “you didn’t build that.”

P.P.S. And you can find my collection of Bernie humor by clicking here.

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There are some fortunate people (in the Cayman Islands, BermudaMonacoVanuatuAntigua and Barbuda, and a few other places) who don’t have to pay income taxes.

The United States used to be in that lucky club. The income tax did not become a permanent blight upon the nation until 1913 (there was a temporary income tax during the Civil War and an attempted income tax in 1894 – ruled unconstitutional in 1895).

Indeed, this odious tax is a relatively new invention for the entire world. If my memory is correct, the first income tax was a temporary measure imposed by the United Kingdom to finance the fight against Napoleon. And the U.K. also was the first country to impose a permanent income tax (ironically, to help offset lower taxes on international trade).

In every case, politicians followed the same script. Income taxes originally were supposed to have low rates and only apply to the rich.

But it was simply a matter of time before small taxes on the wealthy became punitive taxes on everybody.

Since today is tax filing today for Americans, let’s take the opportunity to highlight two specific unfortunate consequences of the income tax.

First, it enabled the modern welfare state. You can see from the chart that the explosion of redistribution spending only occurred after politicians obtained a new source of revenue (a problem that was exacerbated in Europe when politicians adopted value-added taxes and were able to further increase the burden of government spending).

Needless to say, this is a reason to oppose an energy tax, a wealth tax, or a financial transactions tax. Giving politicians a new source of revenue is like giving alcoholics the keys to a liquor store.

Second, the income tax enabled costly economic discrimination. Prior to income taxes, governments largely relied on trade taxes and excise taxes, and those levies did not create many opportunities for mischief.

An income tax, by contrast, allows the government to impose all sorts of special penalties – either with discriminatory tax rates or with extra layers of tax on saving and investment – on people who generate a lot of economic output.

And it’s worth mentioning that the income tax also allows politicians to create all sorts of special credits, exemptions, deduction, exclusion, and other preferences (about 75,000 pages of them) for politically well-connected interest groups.

These penalties and preferences are both morally troubling (rampant cronyism) and economically damaging (back-door methods of central planning).

Let’s wrap up today’s column with this helpful reminder that the income tax is basically a penalty on productive behavior.

P.S. Politicians can play games with other revenue sources (i.e., special VAT rates or differential tariff burdens), but the income tax stands apart because it is capable of generating large amounts of revenue while simultaneously giving politicians considerable ability to pick winners and losers.

P.P.S. If you need some gallows humor to make it through tax day, go to the bottom of this column.

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I listed the collapse of Venezuela’s socialist dictatorship as one of my “hopes” for 2018.

That didn’t happen, so I included the same hope in my list for 2019.

But will it happen? David Asman seems very confident in this clip from a recent interview.

I was a bit less hopeful. Or at least more guarded in my ability to predict.

But one thing I can state with full certainty is that I hope it happens as soon as possible.

Though I have become a bit jaded. I no longer share lengthy compilations of everything that is going awry in the country.

As far as I’m concerned, the real debate is now whether a new government will adopt the right policies when Maduro is finally evicted (in other words, is there any hope for Chilean-style economic liberation?).

But there are a couple of stories and columns about the ongoing crisis that caught my eye.

Especially ones written by Venezuelans.

Andres Malave wrote for Investor’s Business Daily about what has happened to his country.

Hugo Chavez took power, promising to usher in shared prosperity for all with his “21st century socialism.” …So, when Teen Vogue tweeted recently, “Can’t #endpoverty without ending capitalism!” my initial reaction was, “Let them come to Venezuela.” Venezuela was once the most prosperous country in Latin America, but today almost 90% of its population lives in poverty. Venezuela’s economy is in shambles. …Venezuela’s misery means that it is not uncommon to see children rummaging through the garbage for food. And as basic medical supplies and medicine run dangerously low, newborns and the elderly die unattended in Venezuelan hospitals. …In a 2006 column, Sen. Sanders wrote: “These days, the American Dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina,” all practitioners of 21st century socialism. …What’s particularly galling about Sen. Sanders waxing poetic about the virtues of socialism is that he looks the other way as socialist leaders live in opulence while the masses starve.

A retired professor who still lives in Venezuela explained the wrenching descent of his nation in the U.K.-based Spectator.

The descent began in the early 2000s when the Hugo Chavez government began to take control of…private companies, the judiciary and the police. The descent turned into a nosedive when Nicolas Maduro came to power and the state tightened its grip on oil production, our country’s main source of revenue. Investors fled and skilled workers emigrated. As living standards plummeted, the response was to print more money. Hyperinflation has been the result. …my friends and relatives have lost a lot of weight. We call it the ‘Maduro diet’. …Not so long ago, I lived as you do. I would have thought it impossible that my country, with its hard-won progress, could fall so quickly into the abyss. The wrong politicians with the wrong ideas can have a bigger effect than anyone can imagine.

I don’t want to discriminate against non-Venezuelans, so let’s look at excerpts from some other authors.

In a column for CapX, Kristian Niemietz points out that Venezuela was supposed to be an example of modern “democratic socialism.”

Chávez fans frequently emphasised the many ways in which Venezuela differed from the old Eastern Bloc. They were especially proud of the fact that there was no apparent conflict between socialist economics and political democracy. They also pointed out that the Chavez government, rather than just nationalising lots of big companies like the socialists of yore, was experimenting with lots of different models of social ownership, looking for alternatives to both private enterprise and conventional state-owned enterprises. And they were right. Chávez and Maduro never tried to imitate the former Soviet Union or any of its allies. They tried, really hard, to build something new. And look how that turned out. …Previous socialist experiments have gone through the same honeymoon period as Venezuela, during which they were widely and enthusiastically praised by Western intellectuals.

Notwithstanding, I’m sure we’ll still hear about how “real socialism hasn’t been tried.”

Actually, I’m open to the argument that what happened in Venezuela was a different form of statism.

Though the end result is always the same.

In the case of Venezuela, it’s like Atlas Shrugged in real life.

Francisco Toro opined in the Washington Post about the recent collapse of Venezuela’s power system.

In a country already trudging through a serious humanitarian crisis, the collapse of the electric grid is a final catastrophe. Venezuelans were already chronically hungry, with large numbers reportingthey lost weight because they could not afford enough food. …The stories coming out of hospitals up and down the country have been harrowing. Only some had working back-up generators, and virtually none were designed to carry a whole hospital over many days. A video of a nurse using a hand pump to try to keep an infant alive has been circulating on social media. Thousands of kidney dialysis patients, unable to receive treatment, may face a slow and agonizing death. …the Maduro government has blamed U.S. sabotage for the power crisis. …sabotage accusations against the United States lack any semblance of credibility: Venezuela’s power grid has been in gradual decline for over a decade. …over the past 12 years, the government has run the grid into the ground. After nationalizing the utility companies, the government simply stopped investing in routine maintenance of power stations or transmission lines, setting off a slow deterioration that has made the grid unstable for years.

A story from Fox looks at the wretched circumstances of ordinary Venezuelans.

Thousands upon thousands of Venezuelans pour into Colombia over the crowd cross-country bridge, their faces gaunt, carrying little more than a backpack. Rail-thin women cradle their tiny babies, and beg along the trash-strewn gutters. Teens hawk everything from cigarettes to sweets and water for small change. …the Venezuelans – many with university degrees or decent jobs in what was once the wealthiest nation in Latin America – are now resorting to whatever it takes to survive. …Women sell their locks to local wigmakers in Colombia for around $10-30, depending on length and quality. Other women sell their bodies. Girls as young as 14 line the Cucuta streets available “for hire,” earning around seven dollars “per service.” …more than 55 percent of the healthcare professionals – doctors, nurses, and others – have left the country. Resident doctors who have stayed in Venezuela earn the equivalent of $24 a month, while specialists make just a little more, at $30.

I’ve saved the worst for last.

BBC reports that Venezuela has become such a basket case that graves are being robbed.

At Caracas’s largest cemetery, Cementerio del Sur, most of the graves have been looted, for jewellery, gold teeth, or even bones, which can be sold for use in rituals. For grieving relatives like Eladio Bastida, who checks on his wife’s grave every week to make sure it’s not been looted, the situation is a metaphor for that of embattled Venezuela as a whole.

As far as I know, Venezuela has yet to experience cannibalism, so I suppose things can still get worse.

But that begs the question. Why did Bernie Sanders and other leftists and socialists lavish so much praise on Venezuela?

And now that the chickens have come home to roost and the economy has collapsed, why are they dodging questions about their past support?

Most important of all, why do they want similar policies for the United States?!?

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Today is the 10th anniversary of International Liberty, and I was initially tempted to commemorate the day with another introspective column.

But I decided on a different focus because I just read a story that combines two things – wasteful spending and Washington dishonesty – that I don’t like.

Let’s look at the article, which was published in The Hill.

The Senate Budget Committee on Thursday approved a GOP-backed budget resolution that would allow for draconian spending cuts by reducing both defense and nondefense spending for 2020. …The Senate’s budget sticks to the legal caps for defense — falling from $716 billion to $643 billion, including off-book funds — and nondefense, which would drop from $640 billion to $542 billion. …The spending blueprint also would decrease spending on Medicaid, children’s health insurance and Affordable Care Act subsidies by $281 billion, and on Medicare by $77 billion. “…this is a disastrous budget for the middle class and working families of this country,” said Sen. Bernie Sanders (I-Vt.), the panel’s ranking member.

I was initially semi-excited when I read the story.

After all, we desperately need “draconian spending cuts” in Washington.

But I was only “semi-excited” because I feared – based on past experience – that these supposed reduction were fake.

So I decided to look at the actual numbers in the Senate’s proposed budget.

Lo and behold, my skepticism was warranted. There are zero genuine cuts. Instead, spending increases by an average of 3.5 percent annually under the Senate’s “draconian” budget plan.

Politicians claim there are “cuts” because spending levels in the Senate plan (orange line) don’t rise as fast as what would happen if spending was left on autopilot (blue line).

But this simply means that the burden of government spending won’t grow as fast as previously planned. I’ve exposed this scam in discussions with John Stossel and Judge Napolitano.

And I’ve condemned the Washington Post for playing this dishonest game as well. You also won’t be surprised that Obama used this dodgy approach.

The political elite like this dodgy game because they can pretend they are fiscally responsible while simultaneously making government bigger.

The bottom line is that politicians should be honest. If they want to argue that spending should grow 3.5 percent yearly (or even more), they should explain why Washington deserves more money.

But don’t lie to us about supposed spending cuts when the budget is expanding.

P.S. Remember the “sequester”? Politicians and interest groups squealed that the world was going to end because of an automatic spending cut that wasn’t even a cut.

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